Monday, December 14, 2009

Drugs money "saved banks from collapse" in crisis - UNODC

"Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."

This illicit stuff is not, as most people think, peripheral to the global economy. It is central to it. Costa continued:

"The moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was," he said.

And The Observer added:"It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US."

Officials in some of those centres have denied this, saying that the money came substantially from central banks.

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The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
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